AMENDMENT NO. 4 TO RESTATED REVOLVING CREDIT AGREEMENT
This Amendment No. 4 to Restated Revolving Credit Agreement (the
"Fourth Amendment"), made as of this 29th day of September, 1997, among
the undersigned, amends that certain Restated Revolving Credit Agreement,
dated as of December 20, 1996, as amended previously by Amendments dated
February 14, 1997, as of March 28, 1997 and as of July 30, 1997 (as
amended thereby and hereby, the "Agreement"), among the Borrowers, the
Agent, individually and as agent for itself and each of the other Banks,
and the Banks (as such terms are defined in the Agreement).
Reference is made to the following facts:
A. The Borrowers, the Agent and the Banks have entered into the
Agreement pursuant to which the Banks have, on the terms and subject to
the conditions stated therein, made loans to the U.S. Borrower;
B. The Borrowers requested that the Banks waive an existing Event
of Default as more fully set forth herein and that the Agreement be
amended to modify, among other provisions, the financial covenants therein
to avoid the occurrence of an Event of Default; and
C. The Agent and the Banks have agreed to make the modifications
requested by the Borrowers solely in accordance with the terms and
conditions of this Fourth Amendment.
NOW, THEREFORE, in consideration of the premises and of good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto agree as follows:
Section 1. Definitions. All capitalized terms used herein which are
defined in the Agreement shall have the meanings herein as therein, except
as otherwise specifically provided herein.
Section 2. Amendments to the Loan Documents. From and after the
date hereof, the Agreement is hereby amended as follows:
2.1 The definition of Availability is hereby amended to provide
in its entirety as follows:
"Availability. The sum of the U.S. Borrowing
Base, less the "Availability Reserve" (as defined below),
minus the Canadian Deficiency. For the periods described
below, the Availability Reserve shall equal the amount set
forth below:
Period Availability Reserve
September 16, 1997 through $7,000,000;
September 29, 1997
September 30, 1997 through $7,500,000;
October 30, 1997
October 31, 1997 through $8,000,000;
November 27, 1997
November 28, 1997 through $8,500,000; and
December 30, 1997
December 31, 1997 and $9,000,000.
thereafter
2.2 The definition of EBITDA is hereby amended to add the
following language, including a new clause (viii), as follows:
", excluding (viii) the effect of any write-down or
write-up in the value of any assets in connection with
any reclassification as 'assets held for sale' of
assets of the U.S. Borrower's ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Division
or assets of the U.S. Borrower located at the U.S.
Borrower's facilities in Berlin, Wisconsin."
2.3 The definition of Maximum Amount in Section 1.1 of the
Agreement is hereby amended to provide in its entirety as follows:
"Maximum Amount. $65,000,000, less the dollar
amount of any Voluntary Reduction or Mandatory
Reduction pursuant to Section 2.7 hereof."
2.4 The portion of the table in Section 6.9 of the Agreement
regarding the period from September 1, 1997 through September 30, 1997 is
hereby amended to provide as follows:
"Period Maximum Usual
Allowance Permitted
in Minimum EBITDA
September 1, 1997 ($542,000) $0*
through September 30,
1997
Section 3. Waiver of Event of Default. The Borrowers hereby
represent that for the period August 1, 1997 through August 31, 1997,
EBITDA equalled negative $500,000 ("August EBITDA"). In reliance upon
such representation, the Agent and the Banks hereby agree to waive the
occurrence of an Event of Default pursuant to Section 6.9 of the Agreement
on account of august EBITDA being less than Minimum EBITDA for such
period.
Section 4. Appraisal of Collateral. The Borrowers hereby
acknowledge that the Banks, through the Agent or the Agent's designees, at
any reasonable time within thirty days (30) days after the date hereof and
at the Borrowers' sole cost and expense, may visit and inspect the
properties and offices of the Borrowers for the purpose of conducting an
inspection and appraisal of the Collateral (the "Collateral Appraisal").
Borrowers further agree that the foregoing Collateral Appraisal shall be
in addition to the visits, inspections, examinations and appraisals
contemplated by, and shall not be subject to the limitations set forth in,
subsections (a) and (c) of Section 5.5.
Section 5. Conditions precedent to this Amendment. The agreements
of the Agent and the Banks set forth in this Fourth Amendment are subject
to the satisfaction of the following conditions precedent:
5.1 At the time of the execution of the Fourth Amendment, there
shall exist no Defaults or Events of Default under the terms of the
Agreement, as amended hereby, the Loan Documents and the ancillary
documents other than the Event of Default to be waived under Section 3
hereof;
5.2 The U.S. Borrower shall have reimbursed the Agent for all
of the reasonable fees and disbursements of counsel to the Agent, which
shall have been incurred by the Agent prior to or in connection with the
preparation, negotiation, execution and delivery of this Fourth Amendment
and the consummation of the transactions contemplated herein;
5.3 Since the date of the commencement of the Agent's most
recent commercial finance examination, other than for changes reflected in
the written information provided to the Agent and the Lenders in the so-
called "Business Update" dated September 18, 1997, there shall have been
no changes in the assets, liabilities, financial condition, business,
income, operations or prospects of any of the Borrowers, the effect of
which have had or will have, in the aggregate, a material adverse effect
on the assets, properties, business, prospects, income, operations or
financial condition of the Borrowers;
5.4 This Fourth Amendment shall have been duly and properly
authorized, executed and delivered to the Agent, and shall be in full
force and effect; and
5.5 The U.S. Borrowers shall have paid to the Agent, for the
benefit of the agent and the U.S. Banks in accordance with their
respective U.S. Commitment Percentages immediately following the execution
and delivery hereof, a non-refundable restructuring fee of $50,000.
Section 6. Representations and Warranties. In order to induce the
Agent and the Banks to enter into this Fourth Amendment, the Borrowers,
jointly and severally, represent and warrant to the Agent and each Bank
that:
6.1 Each of the Borrowers (a) is a corporation duly organized,
validly existing and in good standing under the laws of the state or
Province in which it is organized as listed on Exhibit D to the Agreement,
(b) has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (c) is duly
qualified and in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction listed in Exhibit D to the
Agreement;
6.2 The execution, delivery and performance of this Fourth
Amendment and the transactions contemplated hereby are within the
corporate power and authority of each Borrower and have been authorized by
all necessary corporate proceedings, and do not (a) require any consent or
approval of any creditors, trustees for creditors or shareholders of any
of the Borrowers, including, without limitation, the Indenture Trustee or
any other party pursuant to the terms of the Indenture Agreement, (b)
contravene any provision of the charter documents or by-laws of any of the
Borrowers or any law, rule or regulation applicable to any of the
Borrowers, (c) contravene any provision of, or constitute an event of
default or events that, but for the requirement that time elapse or notice
be given, or both, would constitute an event of default, under, any other
agreement, instrument, order or undertaking binding on any of the
Borrowers, including, without limitation, the Indenture Agreement, or (d)
result in or require the imposition of any Encumbrance of any of the
properties, assets or rights of any of the Borrowers other than Permitted
Encumbrances; and
6.3 Each of the representations, warranties, covenants and
negative covenants set forth in this Fourth amendment, the Agreement, as
amended hereby, and the other Loan Documents is true and correct on the
date hereof in all material respects, and no event has occurred and no
condition exists which constitutes a Default or Event of Default under the
Agreement, as amended hereby, or any other Loan Documents or any Ancillary
Document.
Section 7. Indemnification. The Borrowers shall absolutely and
unconditionally indemnify and hold harmless the Agent and each of the
Banks against any and all claims, demands, suits, actions, causes of
action, damages, losses, settlement payments, obligations, costs, expenses
and all other liabilities whatsoever which shall at any time or times be
incurred or sustained by the Agent or any of the Banks, or by any of their
shareholders, directors, officers, employees, representatives,
subsidiaries, affiliates or agents (other than as a result of the gross
negligence or willful misconduct of the Agent or any of the Banks or such
officers, directors, shareholders, employees or agents thereof) on account
of, or in relation to, or in any way in connection with, any of the
arrangements or transactions contemplated by, associated with or ancillary
to either this Fourth Amendment, the Agreement or any of the other Loan
Documents or any of the Ancillary Documents, whether or not all or any of
the transactions contemplated by, associated with, or ancillary to this
Fourth Amendment, the Agreement, any of such Loan Documents or any of such
ancillary Documents, are ultimately consummated (other than those costs or
expenses incurred by the Banks other than the Agent in connection with the
syndication, and by the agent and the Banks in the day-to-day
administration of the transactions contemplated by the Agreement, as
amended hereby, and the other Loan Documents).
Section 8. Miscellaneous.
8.1 As of the date hereof, and after giving effect to the
consummation of any transactions contemplated by this Fourth Amendment,
the Borrowers acknowledge that each has performed, satisfied, or complied
with all covenants and conditions to be performed, satisfied or complied
with by it under the Agreement, as amended hereby. The Borrowers hereby
covenant and agree that, after giving effect to the consummation of the
transactions contemplated hereby, the Borrowers will continue to perform,
satisfy or comply with all covenants and conditions to be performed,
satisfied or complied with by each of them under the Agreement, as amended
hereby.
8.2 The obligations of the Borrower (i) to repay to the Agent
and the Banks all of the unpaid principal of each of the Revolving Loans
made or to be made in the future pursuant to the Agreement, as amended
hereby, (ii) to pay to the Agent all of the unpaid interest accrued or to
accrue thereon, (iii) to pay to the Agent and the Banks all of the other
Obligations of the Borrowers, are and will continue to be entitled to all
of the benefits and to all of the security created or contemplated by the
Agreement, as amended hereby, and the other Loan Documents.
8.3 Except as otherwise expressly provided in this Fourth
Amendment, all of the terms, conditions and provisions of the Agreement
and each of the other Loan Documents remain unaltered and are in full
force and effect. The Agreement and this Fourth Amendment shall be read
and construed as one Agreement.
8.4 This Fourth Amendment may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
and the same instrument. In making proof of this Fourth Amendment, it
shall not be necessary to produce or account for more than one counterpart
thereof signed by each of the parties hereto.
8.5 All of the Obligations undertaken hereunder by the
Borrowers are hereby undertaken by each of them jointly and severally.
8.6 The captions and headings of the various sections and
subsections of this Fourth Amendment are provided for convenience only and
shall not be construed to modify the meaning of such sections or
subsections.
8.7 The invalidity or unenforceability of any one or more
phrases, clauses or sections of this Fourth Amendment under particular
circumstances shall not affect the validity or enforceability thereof or
of the Agreement, as amended hereby, under other circumstances, or the
validity or the enforceability of the remaining portions of this Fourth
Amendment or the Agreement, as amended hereby.
8.8 This Fourth Amendment shall be deemed to be a contract
under seal and shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts (without giving effect to any
conflicts of law provisions contained therein).
IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment under seal as of the day first above-written by the respective
officers hereunto duly authorized.
UNITED STATES LEATHER, INC., as a Borrower
By:
Title:
A.R. ▇▇▇▇▇▇ LIMITED, as a Borrower, and
Guarantor of United States Leather, Inc.'s
Obligations
By:
Title:
BANKBOSTON, N.A. (f/k/a The First National
Bank of Boston), as the Agent
By:
Title:
BANKBOSTON, N.A. (f/k/a The First National
Bank of Boston), as a Bank
By:
Title:
▇▇▇▇▇▇ FINANCIAL, INC., as a Bank
By:
Title:
THE CHASE MANHATTAN BANK, as a Bank
By:
BTM CAPITAL CORPORATION, as a Bank
By:
Title: